Gen Z has begun to make its mark on Europe’s VC scene, sourcing startups and working on deals at some of the ecosystem’s most active firms. Best known until now as the generation to drive the newest viral TikTok trends and kill off skinny jeans, they’re also flexing their muscles as future unicorn pickers — so, which sectors are they interested in right now?
Founder of the global Gen Z VCs community group, Meagan Loyst, conducted a survey of more than 700 people to find out what’s hot — and what’s not — among European VC’s youngest generation. The respondents were all attendees of a series of events for Gen Z VCs in eight of Europe’s tech hubs: London, Paris, Berlin, Milan, Copenhagen, Barcelona, Stockholm and Amsterdam.
Gen Z want to be the trend-setters in investment, too
This year, AI appeared among the hot topics of every city surveyed. “With younger investors, you tend to see a gravitation to newer up-and-coming trends,” Loyst tells Sifted.
Back in 2020, a global survey of Gen Z VCs by Loyst and the Gen Z VCs community revealed that the creator economy was the commonly cited area of interest for this generation of investors.
Three years on, and the creator economy failed to gain a mention as a sector of interest anywhere except in London. Lack of interest from the generation that initially preempted this sector’s success could be evidence that the sector is struggling; indeed funding for creator economy companies in Europe dropped 47% in H1 2023 compared to the same period a year earlier, according to Dealroom.
Fintech remains top of mind
Last year, the global Gen Z VC survey showed that fintech was the main sector of interest for investors.
This year, despite funding for European fintechs dropping faster than any other sector in Q1, Gen Z investors are still keen to get involved: it featured as an area of interest in all but one (Stockholm) of the European locations polled. Particular subsectors mentioned included the climate fintech crossover of sustainable finance and payments startups.
Climate is still due its big boom
Climate tech was the most or second most frequently cited area of interest for six of the locations, and Loyst says the sector is on the up. She adds though that so far, interest in climate tech has been eclipsed by the Web3 movement — a sector which Gen Z VCs in three locations (Paris, Copenhagen and London) are still keen on.
Funding numbers suggest that the climate sector is not, contrary to popular belief, resilient to the effects of the recession, but Gen Z’s generational focus on climate change could, Loyst suggests, relight the fire for this sector.
“I think climate is going to have a big moment,” says Loyst, adding that “with younger investors, the need and desire to invest with a purpose is very high.”